Customers should recover after fraud found to be isolated, says Janney CapitalJanney Capital noted investors were "clearly concerned" about the potential for significant additional fraud losses at Customers Bancorp after it recorded a $6M loss provision related to a potential fraud as part of its Q2 results, but the firm thinks the company's subsequent announcement that it believes the event was isolated should help ease those concerns. Janney said it expects the shares to recover from their selloff and keeps a Buy rating and $32 fair value estimate on Customers' shares.

Customers Bancorp's internal investigation concludes fraud was isolated eventCustomers Bancorp, the parent company of Customers Bank, announced that its internal investigation has concluded that the previously reported fraudulent transaction that resulted in Customers taking a special $6M specific reserve in the Q2 was an isolated event. "Our Risk Management, Loss Prevention, Credit and Finance teams have been working continuously since Wednesday, July 22, when the potential fraud was detected by the Company," stated the company. "This type of thorough review was productive as it also identified two process and policy improvements that Customers Bank has already implemented that will minimize the chances of a similar fraud ever being committed in the future. We also looked at our collateral for this credit and believe the $6M specific reserve is adequate and was a prudent move by Customers," company continued.